Shares in Petra Diamonds slipped 7% in early trading Monday after the miner reported its loss had broadened due to a devaluation of its four deposits.
The company reported a net loss of $258.1 million for the period ending June 30, as opposed to a loss of $203.1 million the year before. This was due to the combination of impairment charges — a reduction in the value of an asset — on its Cullinan, Koffiefontein, Finsch and Williamson mines caused by weakening prices for smaller diamonds, and a loss stemming from the ceasing of operations and sale of its Kimberley and Helam deposits.
Revenue at Petra fell 6% to $463.6 million, with the miner selling 3.7 million carats at an average price of $124 per carat. Production for the fiscal year ending June 30 grew 1% to 3.9 million carats.
The company’s debt increased to $564.8 million from $554.9 million at December 31. To help drive efficiency and cut expenses, Petra has launched Project 2022, a three-year plan to save $150 million to $200 million and pay down its debt.
The miner expects diamond prices to stabilize as the upcoming holiday season in the US and China approaches, it noted. Petra realized sales of $61.6 million for its September tender, which occurred after the end of the second half, as prices fell 4% on a like-for-like basis compared with the April-to-June quarter.
Petra operates the Cullinan, Finsch and Koffiefontein underground mines in South Africa and the Williamson open-pit facility in Tanzania.
Image: Inspection work being carried out at Cullianan. (Petra Diamonds)